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Treasuries Move Sharply Lower, Extending Yesterday's Pullback

Extending the pullback seen in the previous session, treasuries showed a significant move to the downside during trading on Friday.

Bond prices moved notably lower in morning trading and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 8.7 basis points to 3.484 percent.

The ten-year yield added to the 2.2 basis points uptick seen on Thursday, climbing further off Wednesday's four-month closing low.

Optimism about China reopening reduced the safe-haven appeal of bonds, with a top Chinese official saying the worst was over in the battle against Covid-19.

A rally on Wall Street may also have weighed on treasuries, as tech stocks led a rebound following the steep drop seen over the two previous sessions.

In U.S. economic news, the National Association of Realtors released a report showing a continued decline in U.S. existing home sales in the month of December, although the decrease was much smaller than economists had expected.

NAR said existing home sales slumped by 1.5 percent to an annual rate of 4.02 million in December after plunging by 7.9 percent to a revised rate of 4.08 million in November.

Economists had expected existing home sales to tumble by 3.4 percent to an annual rate of 3.95 million from the 4.09 million originally reported for the previous month.

Looking ahead, next week's trading may be impacted by reaction to the latest U.S. economic data, including reports on durable goods orders, fourth quarter GDP, new home sales and personal income and spending.

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